401k Loan to Fund Off-Market Deal

[Scott Royer]

I am looking at taking out a 401k loan to give me enough money to put the money down and fund the needed rehab on an off-market property.  The 401k loan max is $50,000, paid over 5 years, which is the amount I would probably pull to get done what I need to do.   With my 401k, the "penalty" is a 9.5% interest, and it calculates to be approximately $500 per pay check (before tax) to repay the loan.  Technically, this would be approx. $300 per check after tax, but I am also paying the 9.5% interest back to myself pre-tax which I think is a huge win.  

The possible cash flow post renovation could be $700/month, so if I deduct the $600/month that I am paying back into my 401k.  Is the $100/month cash flow worth the investment?  

Am I missing anything important here?  Should I look at this as something I put more value into the equity of the home, and look at this property as something that will have killer cash flow 5 years from now?  Or should I stop my stressing and just move on?